The Fair Work Commission has provided a useful reminder to employers as to the benefits of securing a deed of release from exiting employees.
A deed of release operates to set out the terms of a settlement when an employee is leaving the business and usually to confirm that there are no outstanding complaints between the parties. There is an expectation for employers that employee by entering into a deed indicates their intention not to pursue continue litigation against their former employer.
In L v Anfield Muirs P/L t/a Good Guys [2015] FWC 7343, an employee of a Good Guys store in Perth, despite negotiating a settlement involving the signing of a deed of settlement, tried to continue an unfair dismissal application and workers compensation claims against her employer.
The deed of release that she signed up to as part of her settlement required her voluntary resignation which was provided in a resignation letter that she signed at the same time as the deed. It was a term of the deed that the employee agreed to withdraw and fully discontinue “actions, applications or proceedings quotes she had against her employer, which included her unfair dismissal claim.
Contrary to the terms of the settlement, the employee continued her unfair dismissal claim before the Fair Work Commission. Commissioner Williams at the commission noted that the employee had entered into a deed of settlement and prevented the employee from continuing her complaint.
The Fair Work Commission observed that employer was entitled to expect an employee to follow the terms of the settlement and discontinue their claims in the same way as an employee would expect an employer on the settlement agreement and make any payments provided for in the Deed of Release.
Learning Point
The value in a carefully drafted Deed of Release should not be overlooked. A properly executed deed enables employers to prevent litigation against them brought by former employees. When faced with claims in a jurisdiction where each party pays their own legal costs, being in a position to force an employee to discontinue their complaint is invaluable.
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Disclaimer
Ashbrooke Law publications are intended to provide guidance and general information. They should not be relied upon as legal advice. Formal legal advice should be sought on matters of interest arising from this article.